[8:06am ET] Gold trading late last week led me to ask the following questions: Capitulation or Manipulation? Buying Opportunity or Crisis?
Here is my thinking: Interventionists at the Fed, Treasury and/or IMF are at work here given that on Thursday over 8 tonnes of gold was sold via the gold ETF (GLD) and the price dropped -$22.10/oz over two days. The price of Silver dropped even faster. Then why was the price of copper, platinum and palladium disaffected? Why on those two rally days in the equity markets was the precious metals industry group the lone loser, where the goldminer index ($XAU) plunged -5.0% on Thursday and a further -3.4% on Friday? Why did this happen on the days that the $USD was bumping up against the 50-day Moving Average line of resistance and the Euro pushing down on its 50d MA support? Was the attempt here to scare the goldbugs, or just the goldbugs capitulating at a time when probably they should be waiting the outcomes in the currency market and regarding the important divergence in the metals group?
I don
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http://tinyurl.com/ctxchn
I’m learning….slowly….the same wisdom here, but an article to reinforce the learning.
“With Treasuries still offering rather skimpy yields, Direxion on Thursday came out with two sets of new exchange-traded funds allowing investors to juice returns in government-backed long-term bond markets. The four new DirexionShares 3x ETFs are leveraged bull and bear index-based portfolios that try to either provide 300% of the daily performance or 300% of the inverse of the daily performance of the NYSE Current 10- and 30-Year U.S. Treasury indexes.” The Direxion Daily 10-Year Treasury Bull 3x Shares (NYSE Arca:TYD) The Direxion Daily 30-Year Treasury Bull 3x Shares (NYSE Arca:TMF) The Direxion Daily 10-Year Treasury Bear 3x Shares (NYSE… Read more »
http://ronsen.blogspot.com/2009/04/ugly-stick-touc…
Just wanted to find an “oldie”…and this one’s plenty old.
Ron- I remember ‘Scotty’ and ‘Honey’ getting plenty of radio play in the late sixties. Being kids, most of us at the time would have groaned and changed the station when driving with peers. But driving alone I left ’em on. Takes me back.
I know very little about the relationship interest rates and investment appetite, but was surprised to see the miners I own (who are base metal miners with gold assets as well) in Australia dropping this morning, despite the rise in the price of gold, and recent rises in zinc and copper prices as well. But I did see that the Reserve Bank of Australia cut 250 basis points (is that the right terminology? – .25%) of its lending rate today. I assume that it is this action that has put a damper on the market this morning. (Still, at 3%… Read more »
‘Safe as houses’ still has some play in the mind of investors. Rate cuts by the major Reserve Banks tell you more about what the government is trying to do to help homeowners or their own PR relations IMHO. There ya go Grym, an opinion! (from my ex-advertising mind)
Not only has TA not been reliable for ultras. I don’t think it has been reliable for any stock. I know this will make me Persona non grata around here. Instead of spending an inordinate amount of time learning all the pennants, head and shoulders, double bottoms, triple bottoms, waves, channels ect. It might be a better idea to learn to think like a criminal and get in the mind of the “SMART money”. Instead of looking at the chart a better approuch would be to think, “what are those thieves up to today.”
I agree completely that TA is not a “reliable” indicator. This is how I think of TA. TA is like card counting. It doesn’t guarantee that my next hand will be a winner. However, if I play enough hands, and I am good at counting, I will win more often than if I just employ hunches and guesswork. TA is a counterweight to emotion. It allows me some more objective measure of cheap vs expensive. It provides me a rational framework for buying low and selling high, which acts as an anchor to my emotions. Lastly. Big money cannot move… Read more »
I am betting on the house (banks) while that printing press is still running. Sold all financials but ready to load back up when I see the big boys buying. (learned that here)
Better chance of citibank doubling than GG
What I made the most on and don’t know beans about it?
APWR
vb
RE:”I am betting on the house (banks) while that printing press is still running. Sold all financials but ready to load back up when I see the big boys buying. (learned that here). Better chance of citibank doubling than GG” I’ve heard remarks here on the dilutive effects of new share sales. Here is BAC that appears to have offered dilutive new shares as quietly as possible. Why? Is this as good as their share price gets or are they using present turmoil/overbought positions in which to push through with a program generally perceived as negative to the shareholder, before… Read more »
vanillabean – APWR – I see this one had a good run. There’s a long black candlestick from today (bearish engulfing), I guess you dumped it?
hi chicken
no, I didn’t dump APWR but thanks for the heads up… I will probably sell in the AM. I can’t get a vibe for anything right now. STI took a big hit today. I love palm but price too high to buy more.
second ave.. are you all cash and meditating in sedona?
vb
PALM looks kind of risky right now, don’t buy yet the run up seems to have run out of steam a couple weeks ago. Honestly it might be wise to sell in this environment. STI shows a long black candlestick but not engulfing, I’d wait to sell it. If it gaps down and doesn’t recover right away I’d be tempted to cut her loose. The candlestick alone isn’t a good enough reason to sell.
Some folks think we’ll get a dead cat bounce in financials, maybe HB&B played the market today…?
i was messing around with some charts last weekend (17 apr snapshots). Check the XLF chart, if it goes below that 8.70 or so level, its back into that channel
Nice chart shiva. I’m going to see if we get a bounce tomorrow and if not will definitely sell my BAC. Going to break it off with TECK for sure as well. I hate to move to gold miners because I’m already overloaded with gold and I don’t see anything else besides going short but one day does not a trend make. Maybe it’s time to sit on the sidelines for a few days to let things sort themselves out…
Haven’t we been waiting for this pull back? I still suspect SPX 740, them move to 900. Go ahead and take profits tomorrow if you’ve been long since 666. No harm, no foul. Look where we were 30 days ago.
Some day I’ll learn to let my winners run.
http://tinyurl.com/d3zf75
if you are long or short individual names for a quick trade, make sure to check the earnings calendar & not get caught by earnings…..
lmao
“lmao”
You like it as well?
Thanks Fred. BTW – I like your diagram.
https://scs.fidelity.com/other/offers/registration…
If you move 25k into their 401k acct, they are offering 60 commission free trades….. for new or existing customers
Shiva
Thanks a lot. you just save me lots of money
Vinod,
I went to fidelity to deposit a check today & they had this free trade ad that i happened to notice. For existing customers, you would think they wud send an email or something, nah, that would be too easy 🙂
BAC offers 30 free trades per month as long as you have a collective $25k among all your accounts with them.
http://www.bankofamerica.com/investing/index.cfm
I do not bank with them. just found out from my gf
Will Leveraged ETFs Put Cracks in Market Close?
http://tinyurl.com/cfk27l
Jack Cockwell, the group Chairman at Brookfield is up for election to the board at Teck. Brookfield are the guys that took out Stelco in what’s been seen by some as a blatant disregard for things legal. They have deep pockets and aren’t afraid to make a deal happen at the expense of public stakeholders. This bears watching.
Agreed. This bears watching.
Just the the presence of Jack and his minions anywhere near the boardroom makes the hair on my back stand up. To the shareholders of TCK I can only say “Be prepared to be Bam-ganged!”. These fraudsters will be working overtime developing shorting strategies that will take the share price to earth, send the bondholders running, and push this heavily indebted company into CCAA – another made-in-Canada show where they hold the best tickets. With BAM in deep doo-doo with commercial real estate’s impending collapse, they need a win – and TCK may be the next meal ticket. My 24,000… Read more »
“My 24,000 cancelled shares of STE.a are a constant reminder that this is not a battle I want to be part of.”
Sounds like sage advice, it was had for me to break it off but will do so 1st thing in morning. The only replacements I have in my sights at the moment are KGC and GG.
This sounds ominous for Teck shareholders.
Again. I am a beginner. I was fortunate to have trades that worked this time. Some of it was prep, some of it was just the “weather.” two charts, FAZ and BAC. both 15 min time frames. Typically i watch FAS as the obvious counter to FAZ. but they both dont tell anything about each other as they are supposed to be mirrors. So i chose to watch a) BAC with earning this am, and b)UYG, the opposite of SKF. After the inverse h&s failed on FAZ last week, I was bummed. However i was able to get out with… Read more »
I’ve posted this question before but never got a response: does it make sense to do TA on 2x and 3x ultras? The volatility induced value erosion would mean that the underlying could be at strong support and the ultra could be who knows where, but most probably not indicating the same level of support
I don’t think TA on the ultras would be as reliable as on the underlying index due to hysteresis, magnification of error, and decay. At least considering the underlying TA first is my approach.
“The volatility induced value erosion would mean that the underlying could be at strong support and the ultra could be who knows where, but most probably not indicating the same level of support.”
Exactly. If the index bounces a couple of times off a certain support level and then comes near it for the third time, the ultra ETF (either long or short) will be BELOW that support level as a result of value erosion during fluctuations. That’s why you will get incorrect results by using TA on the ultra ETFs — use the underlying indexes instead.
no, it doesnt. Supposed to use the underlying to get a picture. Thats what i hv read in all the forums
well my personally opinion is you can. as long as there are buyers and sellers, there is psychology, and that is all a chart is. However I also agree for something such as an etf that relies on Russell 1000 Financial Services Index, I also couple other securities to give me the signals, as I did today. Such as BAC. and opposite etf’s that yeild a different multiple of the underlying, such as XLF, UYG, SKF. In thinking about my own reply, I would prob refrain from trading any stock on just the charts and patterns of that one stock.… Read more »
i think ta is ok as its just trying to map the psychology of price action.
NYU- Thanks for your post about today’s action. I was watching BAC at 8.50 and probably would have pulled the trigger on the second test there but waited after seeing your comments.
glad i can help.
today market fell on low volumes, there were no buyers at all…. Remembering that volumespread analysis book, it almost looks like professionals stayed away and no price support.
“it almost looks like professionals stayed away and no price support.”
Maybe they were short equities today.
NYUGrad- Not being a chartist, I’ll just note that you were able to take a failed play in stride, and immediately turn your attention to the next play. IMO, your abililty to disallow ‘getting bummed’ get in the way is even more important than the charting.
The charts have been saying “stand aside” since last week.
“The charts have been saying “stand aside” since last week.”
Yes they have, I think this chart faked me out though:
Got a phone call from a friend and complain that he has FAZ and it was going down and FAS was going up so he decided to buy FAS today and dam FAZ soared.
He got so sick of it he said I decide not to make the decision on my own because it just doesn’t work for me.
There may be lot like him and for them best place to go is CTAB. I mention him about CTAB
Pass the longs a heaping bowl of novocaine!
“Pass the longs a heaping bowl of novocaine!”
We’ve got fried chicken over here…. This exercise in futility ain’t worth my time, that’s for sure.
“Will offer debt securities, warrants, units, contracts, preferred, common and depositary shares”
I deleted the link as it had a clause at the bottom of the article that read “The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.”
But its real news.
Pretty sure a URL is public domain. They just don’t want you cut and pasting their article content elsewhere. How else would they. Get page views and ad revenue?
it was filed with SEC
http://tinyurl.com/cqpwbj
CNBC/Reuters article
http://tinyurl.com/ctj9vp
Short-term sentiment looks like someone took a sledgehammer and did their best to ring the bell.
http://tinyurl.com/ow5ml
Vinod- I’ve thrown a few flags on the table twice in the past two (trading) days to see which way the wind’s blowing and they got swept off right away (still can’t believe I got shaken out of FAZ last Friday at 8.81). I’m not going to (continue to) allow these kinds of plays to chip away at the portfolio. I started a new position in SLW yesterday, which I hope to hold for an 8-10% gain and/or a 5% loss. Otherwise it’s all cash. (I was also fortunate enough to be able to [finally] talk my wife into cash… Read more »
2nd
Next plan is to buy OEX call, when market is down enough. Will let you know.
Do plan to buy FAS under 5.90.beside that I have no idea what to play. Will follow your trade.
Is it just me or does it seem that Tuesday is usually a big counter trend day since September.
So now I know the point of Brigandi’s interview a week ago.
http://tinyurl.com/c69kdy
It was to entice traders into FAS, and out of FAZ. Too simple? That’s why I’m labeling it Brigandi’s Razor.
http://www.nytimes.com/2009/04/21/business/global/…
Switzerland’s forecast for deflation as of July.
Bring it on I say. Europe is too expensive for family holidays!
I am trying to do my Vadym “If then” scenarios. Imagine if you are now trying to figure out what to do with the official stress test results. After today’s action, which might be blamed on the mystery leak which may or may not be true, and was already refuted. But also the market dropped due to potential loan losses, gm pending bankruptcy, and natural pullpack from several non stop up days. Then there were those news releases last night from NYT and WSJ regarding the govt converting tarp into share conversions. Do they release the stress test as planned?… Read more »
“it seems any of these options will cause more doubt, skepticism and selling.”
I’m agree. And I’m thinking today’s action was a result of the BAC “white lie”. Positive “surprises” no longer seem to satisfy the pessimists. It seems HB&B have run out of ammunition, the same scenario as last July when they tried to pass off the first set of white lies.
“The economy is strong, the banks are fine” Survey says: NNNNEEEEEETTTTT! So it’s back to the drawing boards while the market tumbles back down.
If we don’t gap up I’m selling.
Took the day off today as I had some off-time due and I had an inkling today’s markets would “interesting”. Hedges worked well today – UUP, some Global Bond stuff in my long-term account, as C$ crapped-out -2%. Doubled my position- now full – in DV. Picked up some partial positions in some high flyers – eg TNDM, IPHS. Stopped out on some big winners from the last month+ (e.g. GU). Looked for an entry into gold somewhere but didn’t find a way. Overall, down ~2%. Threw in a stink bid on EWZ for tommorow. This all smells like a… Read more »
Mackinaw – This guy seems to have nailed it…
http://evilspeculator.com/